According to the latest research from Counterpoint’s Global Smartwatch Tracker, global smartwatch shipments grew 53% YoY in Q3 2018 with strong performance from fitbit, kids watch brands such as imoo, start-ups such as Amazfit.

Discussing Apple’s performance, Research Director, Jeff Fieldhack, noted, “Apple continues to dominate the smartwatch market with a lion’s share of 30% of the smartwatches shipped. The introduction of the Series 4 this fall was the biggest update from a design and features standpoint, and has quickly resonated with Apple’s loyal user base. Apple’s Series 3 saw an uptick later in the quarter with discounted pricing, while Apple’s Series 1 continued to be the single biggest selling SKU contributing to almost half of all Apple Watch shipments. This could change in holiday season quarter as our channel checks showed pent-up demand for the Series 4.”

Commenting on the major shift in the market, Counterpoint Research Analyst, Satyajit Sinha, noted, “Fitbit continues to shift its focus from predominantly SmartBand/trackers to smartwatches and has now evolved as the next best player to Apple in terms of experience and scale. The launch of the Versa smartwatch was the turning point for Fitbit’s smartwatch segment growth. The health/fitness factor is playing a key role in driving consumer decision making for the adoption of smartwatches and Fitbit has entirely focused on this core use case.”

In our latest smartwatch survey among US consumers, the LTE communications capability in the Apple Watch is the most desirable feature. Cellular connectivity enables watches to work independently of smartphones – a capability that we believe will drive the market. By end of this year, cellular-capable watches will likely contribute to 20% of global smartwatch shipments. This will be a challenge for Fitbit to solve and range LTE SKUs in their portfolio”.

Counterpoint’s Senior Analyst, Hanish Bhatia, added, “The children’s or kids’ smartwatch segment is growing rapidly, especially in Asia. The market is being driven by Chinese brands such as Imoo, Kido, Kurio, TCL and Vtech in US. The segment is attractive for operators as well; there are significant net adds to be gained by Chinese operators and bigger operators such as Vodafone with their V IoT portfolio, AIS Thailand and Maxis in Malaysia, all of which have added kids’ smartwatches to their portfolios to boost new connections and additional revenue streams.

However, a few countries in Europe have been scrutinizing kids’ smartwatches with tracking features (GPS) over security concerns. This is especially the case in the new GDPR environment. So, robust security and user experience will be key to success for this segment.”

Commenting on the market development from a components perspective, Research Director, Neil Shah, noted, “Qualcomm continues to accelerate innovation in the smartwatch market with its recent launch of the Snapdragon Wear 3100 building on healthy adoption of Snapdragon Wear 2100/2500 platforms in LTE capable kids watches. Qualcomm’s latest Snapdragon wear platform is not only enabling LTE connectivity but also bringing a much-needed ultra-low power architecture to the smartwatches. It remains to be seen if the new platform can boost Androidwear smartwatch sales and market share, which have been stagnant at 17%.”

The Smartwatch market is dominated by the top five brands, which account for 69% of the shipments by volume:

Apple’s quarterly shipments grew by 24% sequentially and 31% YoY in Q3 2018 due to the enthusiastic response to the launch of its Watch Series 4.

Fitbit’s share in smartwatch shipments grew sharply to 16%, primarily due to the continued success of its Versa, which was released in April 2018.

Imoo is a sub-brand of a Chinese OEM BBK Group (which owns OPPO, Vivo and OnePlus). Imoo held a healthy 10% global market share in Q3 2018.

Samsung held 8% global market share in Q3 2018. The shipments grew due to a better performance of both its Gear S3 and the new Galaxy Watch launched in August 2018.

Amazfit is a sub-brand of a Chinese OEM Huami, which is also a manufacturer of wearable products for Xiaomi. Amazfit currently holds 3% market share and grew 41% QoQ in Q3 2018. The established sales channels and brand awareness of Mi smartphones and bands will help Amazfit grow in newer geographies such as India.

Research Analyst
Satyajit Sinha is a Research Analyst with Counterpoint Technology Market Research, dedicated to IoT, Mobility, and Cybersecurity. Satyajit has 4+ years in Information technology industry. Prior to joining Counterpoint Research, Satyajit was an Equity Research Analyst.